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South Pasadena Recreates Finance Ad Hoc to Promote Fiscal Integrity

By Eric Licas
The Review

The City Council unanimously voted to recreate a special committee tasked with reviewing South Pasadena’s finances in response to complaints from concerned residents on May 1, just over a month after the group was disbanded.
The Finance Ad Hoc Committee was first assembled Feb. 21 in the wake of financial analysis projecting a $3.7 million budget deficit by the end of the fiscal year. The committee was intended to be an informal group that met privately. It was not given any decision-making power on policy, but its recommendations would have to have been discussed for approval by Council.
Allegations of Brown Act Violations from one of the city’s former finance commissioners, Ed Elsner, prompted Council to dissolve the committee on March 27. A follow-up item on that evening’s agenda, which would have reformed the body as a public advisory group, failed to pass in a 3-2 vote.
Since then, numerous residents concerned about transparency in the city’s finances have called for the recreation of the committee. In response, Mayor Evelyn Zneimer and Councilwoman Janet Braun reintroduced that possibility for discussion during Council’s most recent meeting.
“The abrupt dismantling of the [Finance Ad Hoc Committee] has left us with reduced trust in the decision-making process in a city with a lack of accountability,” Anne Bagaso of the South Pasadena Tenants Union said during public comments on May 1. “It is essential to reinstate this committee with its original members and mission to ensure transparency in the budgeting process.”
One of the Councilmembers who had previously voted against recreating the Finance Ad Hoc Committee, Mayor Pro Tem Jack Donovan, said that it had been formed to fulfill a specific task: to prevent a deficit in the fiscal year ending in 2024. The group assisted in a line-by-line reevaluation of the city’s finances that uncovered more than $2 million in unused funds that will help reduce or eliminate a deficit, Donovan added.
“They did the job,” Donovan said. “In the mid-year review, it’s highly unlikely we will not present a balanced budget by the middle of July. And we’re close. … So, is the budget balanced tonight? No, but it will be.”
Zneimer, as well as Braun and Councilman Jon Primuth, said the Finance Ad Hoc Committee could still play a useful role as the city finalizes the next year’s budget and capital improvement plan. The group’s input could also be helpful in what Councilmembers described as a much-needed overhaul of the city’s bookkeeping and financial reporting.
“No more manually compiling year to date actual reports; we need to have a better system,” Primuth said. “The four members of the prior ad hoc experienced firsthand the frustration of a lack of an adequate reporting system, and I believe they should be the ones to lead the way to improve how the city reports its numbers. And that will restore public confidence.”
Primuth was also one of those who previously voted against reassembling the committee in March. During that earlier meeting, he had expressed displeasure toward one of the committee’s members, Finance Commission Vice Chair Sheila Rossi, and appeared to accuse her of giving misleading information to Council.
Officials later discovered that an accounting error acknowledged by the city’s outgoing finance director, John Downs, had resulted in many irregularities in reports from city staff and the ad hoc committee. During last week’s meeting, Primuth apologized for the tone of his comments regarding Rossi.
“Regardless of my intent, it appears that my words had the impact of accusing her of intentionally misrepresenting, and for that I apologize. … We have to be respectful of each other,” Primuth said.
Councilman Michael Cacciotti also previously voted against reforming the Finance Ad Hoc Committee in March. He had described it as a “duplicative” body that was creating additional strain on city staff.
He was concerned about the committee’s meetings potentially slowing down the development of the upcoming budget. He was open to recreating it, but only if it meets after the city’s June 30 deadline to approve a budget.
Cacciotti went on to thank members of the public for their input, but also disagreed with those who characterized the city as teetering on the brink of a budget crisis. He suggested that negative comments regarding South Pasadena’s financial situation have caused instability in the Finance Department.
“One of the main reasons there’s staffing instability … is directly related to pressure and comments from community members creating an unwelcome and stressful employment environment in this city,” Cacciotti said.
Donovan raised no objection to having the same members of the previous Finance Commission take part in the development of the upcoming budget. Councilmembers also were amenable to Cacciotti’s suggestion that the Finance Ad Hoc Committee meet no sooner than July 1, and so a motion to reform the group won approval in a 5-0 vote.
The scope of its work will be limited to reviewing the upcoming budget, reviewing the capital improvement program and updating the city’s financial record keeping and reporting. It will be made up of the same members it had when it was dissolved in March: Finance Commission Chair Peter Giulioni, Rossi, Zneimer and Braun.
“There’s been a kerfuffle over the last couple of months about finance,” Braun said. “But I do, I really believe that it has been good. Because it has brought out a lot of the issues. It’s brought out where things stand, what needs to be improved, what needs to be looked at. Sometimes it’s not easy, but you need a little bit of kerfuffle to sort of get to the bottom line.”

First published in the May 10 print issue of the South Pasadena Review.

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